The US stock market continued to be weak, coupled with the impact of the Bank of Japan’s unexpected actions, the Hang Seng Index (HSI) fell further on Tuesday. Technically, the upward momentum of the Hang Seng Index is weakening, but the dense support below may limit the room for falling.
The Hang Seng Index (HSI) fluctuated and fell 1.33%
Overnight data showed that the NAHB housing market index in the United States recorded 31 in December, the lowest since April 2020. The performance of the U.S. stock market remained weak on Monday, and the three major indexes continued to decline-the S&P 500 index closed down 0.9% on Monday, the Dow Jones index fell 0.49%, and the Nasdaq index fell 1.49%.
On Tuesday, the Bank of Japan decided to raise the upper limit of the 10-year government bond yield to 0.5%, which caused a sensation in the foreign exchange market. At the same time, this incident hit the Japanese stock market hard, bringing spillover effects and leading to a cooling of risk appetite in the global market. The US stock index futures and the Hang Seng Index were both significantly impacted at that time.
Hong Kong’s Hang Seng Index (HSI) was under pressure on Tuesday. It fell 1.01% at the opening and then went into shock. It fell as much as 2.42% in the session. It narrowed the decline to 0.36% in the session, and closed down 1.33% to 19094.8 points. The Hang Seng Technology Index closed down 3.12% on Tuesday. On December 20, the net outflow of funds from the Hong Kong stock market through Hong Kong Stock Connect was 138 million yuan, and the net sale was 2.073 billion yuan.
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On Tuesday, 16 stocks in the Hang Seng Index rose, 59 fell and 1 was flat. The top three constituent stocks with the best performance and their gains were: Orient Overseas International rose 3.77%; ENN Energy rose 1.9%; Cheung Kong rose 1.73%. The top three constituent stocks with the worst performance and their declines were: Country Garden fell 8.81%; Country Garden Services fell 7.83%; Longfor Group fell 6.64%. The main heavyweights performed as follows: Tencent Holdings fell 3.43%; Alibaba fell 3.45%; China Construction Bank fell 0.65%.
Hang Seng Index (HSI) trend technical analysis
The daily chart shows that the Hang Seng Index (HSI) once fell below the support of 19200 and 19000 during the day, but rebounded with support around the 20-day moving average of 18870, barely closing above the 19000 mark. In the short term, pay attention to whether the Hang Seng Index can rebound back above 19200. If it can, it is expected to resume its strength.
However, the RSI indicator shows that the upward momentum is weakening, suggesting that there is a risk of a callback in Hang Seng, but there is not much room for decline for the time being, because the upward trend line from November to the 18600-19000 area may provide denser support. (Follow the author on Twitter @Legen_DailyFX )
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